Mozambique’s Net International Reserves rose to $3.740 billion in December, marking a recovery following declines in October and November. Despite earlier decreases, reserves are aimed at ensuring economic stability. Governor Rogério Zandamela emphasized prudent management, while adjustments in reserve requirements seek to enhance liquidity within the economy.
In December, Mozambique experienced a notable increase in its Net International Reserves (NIR), which reached $3.740 billion (€3.453 billion). This figure marks the highest level since September, reversing a downward trend observed over the preceding two months, as reported by the Bank of Mozambique.
During October and November, NIR had decreased to €3.682 billion (€3.400 billion), but the December growth represented a 1.5% increase. As of the end of September, the reserves totaled $3.762 billion (€3.474 billion), approximately covering three months’ worth of import needs for the nation.
By January 2024, these reserves rose to nearly €3.601 billion (€3.325 billion), the highest level since September 2021. Furthermore, the reserves achieved a three-year high of €3.807 billion (€3.515 billion) in July. Rogério Zandamela, the governor of the Bank of Mozambique, affirmed the comfort of foreign currency reserves while emphasizing prudent management.
Zandamela asserted, “We won’t burn reserves and we’re not burning reserves,” underscoring the central bank’s commitment to ensuring the country’s economic stability. In light of a growing demand for foreign currency among businesses, the central bank has been urged to relax mandatory reserves for banks.
The increase in mandatory reserve requirements for foreign currency deposits to 39.5% from the prior 11.5% provoked calls for adjustment. Nonetheless, a policy change occurred post-27 January, lowering the mandatory reserve ratios in both national and foreign currency to 29.00% and 29.50%, respectively. This strategic shift aims to enhance liquidity and bolster the economy’s productive capacity.
In summary, Mozambique’s Net International Reserves exhibited a significant recovery in December after two months of decline. This increase reflects a strategic effort by the central bank to manage reserves responsibly while addressing the liquidity needs of the economy. The adjustments made to the mandatory reserve coefficients are indicative of a broader effort to support economic stability and growth.
Original Source: clubofmozambique.com
